It’s Time to Clobber the ‘Hedge-Fund Robber Barons’ – and Our System That Can Rank Stocks with Just One Number Will Let You Do It

By TradeSmith Editorial Staff

Listen to this post
There’s an old Sun Tzu-like business adage that says, “all business is war.”

And in business, as in war, it’s all about “getting an edge.”

It’s all about winning.

Especially with investing and trading – the province of the secretive hedge-fund masters, market manipulators, corporate raiders, and other borderline villains who round out the crowd you and I refer to as “Wall Street.”

For that crowd, it’s all about winning – at any price.

It’s always been that way, going all the way back to the era of the robber barons, and even before.

For proof, let’s take a short tour of modern investing history. You’ll see just how far those “investment pros” have gone to grab their windfalls.

According to “Introduction to Financial Technology” author Roy S. Freedman:

  • In 1815, the Rothschild bank in London made a killing shorting French bonds, allegedly by deploying carrier pigeons to learn of Napoleon’s loss at Waterloo.
  • In 1845, German immigrant Paul Julius Reuter ensured his company Reuters was delivering the fastest reports on Paris stock trading. His secret? Reuter had launched a carrier pigeon network in London five years prior.
  • In 1865, American robber baron “Jubilee Jim” Fisk gained his “edge” by sending speedy schooners to outrace mail ships with news of the Union victory in the War Between the States. He cleaned up when the Confederate bonds he’d shorted went to zero.
  • And over a century later, in 1990, Datek implemented a program that capitalized on split-second discrepancies in small-order trading systems on the big exchanges. Called “The Watcher,” Datek’s innovation eventually paved the way for the day trading era.
Here in the internet era, that “let’s-get-an-edge” obsession has turned into a kind of high-tech “arms race” where the stakes continue to escalate.

And it’s the hedge-fund robber barons who are the major arm buyers here. A few years back, a group of hedge-fund barons built a new subsea cable connecting London and New York. It was the first new transatlantic cable in a decade. And it had just one purpose: to save users six milliseconds – a tiny fraction of a blink of an eye – on every trade they made.

That time, savings mattered – a lot. Each of those milliseconds would be worth $100 million in profits.

There’s a lesson here.

The relentless search for that investing “edge” is more important than ever in separating the winners from the losers.

The investment pros are the most consistent winners, which is logical since they typically account for 90% of U.S. trading volume.

But it’s the professional “villains” – the robber-bankers like Nathan Mayer Rothschild, the “robber barons” like “Jubilee Jim” Fisk, and the hedge-fund buccaneers of today – who traditionally reap the biggest windfalls.

They bend the rules to find that “edge” and rig the game to make sure they win.

That enraging reality is about to change – and change in your favor.

In a special investing event called the “Big Lie”, TradeSmith will introduce you to a new three-tier system for picking stocks that shifts that “edge” back to you.

For once, you’ll be able to play alongside the investment pros. In fact, because you’re investing independently – and with smaller sums that won’t move markets – you’ll be to move with a greater nimbleness and speed than your professional counterparts…

Meaning that you’ll actually be able to outgun and out-profit the hedge-fund elite.

Let me give you a quick peek behind the scenes.

Because once I do, you’ll understand exactly what I’m saying. You’ll understand how significant the “edge” we’re offering you really is.

And you’ll want to be part of it.

I guarantee it.

Follow the Money – TradeSmith Style

The maxim “money makes the world go ’round” was popularized in a song in “Cabaret,” a 1972 musical starring Liza Minnelli.

It’s a powerful bit of wisdom. And it’s certainly true.

Not only does money make the world go ’round, but it does the same for stocks.

When money floods into the market, stock prices rise. Drain that cash away… and share prices drop away.

That’s the power of liquidity.

And it’s pretty simple to grasp.

Pretty simple.

Understanding the impact of capital flows is one thing. Putting that knowledge to work is another story entirely.

It depends on:

  • Where you get that flow-of-money data…
  • How you get it in “real time” to make it useful…
  • And knowing what “action to take” based on that data.
Without those insights, you don’t have the needed “edge.” Financial-markets guru Larry Tab, founder and CEO of the consultant TABB Group, put it this way in a Popular Mechanics interview a few years back:

“For [regular investors like] you or me, it’s kind of immaterial… But if you’re Fidelity, Magellan… or some very large fund and you display what you’re trying to accomplish, what will happen is, people will try and step in front of you. They know, oh, well here’s Fidelity, I’m going to go step in front of them because I know they’re a big buyer and that will move the prices up. And because the market is basically a first-come, first-serve mechanism, it’s really important [to be] closer to the top of the book rather than the bottom of the book.”

Reams of academic and institutional research tout the power of liquidity data. And that liquidity data is available – but not in the “real-time” format you need. We’ve all seen the insights on the power of tracking the buying by corporate insiders – or following the footsteps of big buyers like Warren Buffett.

You can get that information from data services or regulatory filings like the Form 13 disclosures that alert investors when major investors are accumulating blocks of a company’s shares. But even those filings have shortcomings. I’m oversimplifying this, but the point is that those disclosures are lagging indicators. And there are “thresholds” that shrewd activist traders stay below in order to remain off investors’ personal radars.

There’s a better way. TradeSmith has it. And we’re about to share it with you.

Our Triple-Strength Analytics

We’ve developed a new system that we’re calling the BigMoneyIndex (BMI). In real time, it tracks the flow of money into stocks – and out of them, too.

But it’s even better than that.

BigMoneyIndex is a three-tier tracking system fueled by 29 individual algorithms that detect every major transaction (inflow or outflow) that takes place.

As part of that system, we:

  • Bring you big-money activity on virtually every U.S.-listed stock…
  • Break down each of those stocks, looking at technical energy…
  • Drill into the underlying company’s fundamental strength…
  • Boil down each stock recommendation into a grade or “ranking” – a single number on a 1-100 basis that tells you with one glance whether the stock is a “strong buy” or a run-for-the-hills sell.
And it works. Beautifully. So well, in fact, that some Wall Street investment banks pay thousands to use the database these rankings come from.

And now it’s at your service.

We’ll tell you all about this at our “Big Lie” event on Sept. 20.